Warren Buffett has decided not pull his punches about how bad things are going to get in the US.
Speaking of the economy, Reuters quotes him as saying "But the people are already feeling the effects. It will be deeper and last longer than many think."
Buffett’s name gets added to those of people like George Soros who have strong concerns about the next several quarters. The stock market is supporting their views. GM (GM), GE (GE), airlines, and many companies in the financial sector now trade at 52-week lows. The Fed has revised its forecast for GDP down. Many economists polled by Reuters see a bad year ahead.
The CEO of Dow Chemical (DOW) recently said that inflation and the credit crisis are causing significant changes in consumer behavior. Many of the underpinnings that helped several years of grow in the economy are gone.
Buffett’s views may be a little late, but the are, nonetheless, almost certainly true.
Douglas A. McIntyre